Humble Beginnings

RETAIL

In Dying Mall, Two Superstores Found Life

It's a corner that has broken dreams, seeing dozens of stores, big and small, starve for customers and then die.

Yet this retail desert was the birthplace of two of the fastest-growing retail chains in the country.

In less than 10 years, both have become billion-dollar retailers spread throughout the continental United States and now heading overseas.

The retailers are The Sports Authority and Office Depot.

Their birthplace was the corner of Oakland Park Boulevard and State Road 7, at the Lakes Mall in Lauderdale Lakes.

"That was our laboratory, our learning place," said Dick Bennington, Office Depot's first store manager. Today, Bennington is Office Depot's executive vice president of operations, and he expects to be president of more than 1,000 stores when the company merges with competitor Staples.

Today, most of the Lakes Mall is a vacant lot. Gone are Britts and Jefferson Ward department stores and a motley collection of independent retailers that stuck with the 63-store mall before it closed in 1990.

The rest of the area is a strip shopping center with Linen Supermarket, McFrugal's discount store and Smart & Final food store. Behind, there's The Sports Authority's headquarters, which has 450 employees in about 80,000 square feet of space.

Office Depot celebrates its 10th anniversary next month. At the same time, it prepares to be acquired by the second-biggest company in the office-supplies industry.

The Sports Authority is pushing into Japan and is planning to add up to 60 stores this year and next.

Founders of both companies said they picked Lakes Mall for their first stores because of the potential traffic. It was and remains one of the busiest intersections in Broward County.

But the corner had another key element - landlords desperate enough to lease large empty spaces at low rent, said one shopping-center consultant.

"They were probably giving it away," said Bill Wholey of Fort Lauderdale. New retailers usually incubate in low-rent districts because they can't afford choice locations, he said.

Starting out at Lakes Mall helped keep executives humble.

The first day the store opened, Office Depot co-founder Steve Dougherty had his car stolen.

"It made me invest in an alarm system," he said.

The Sports Authority founder and chief executive Jack Smith remembers that for the first year or so, his desk was next to the bathroom. His floor would get wet when toilets flooded.

Kelly Conway, then head of information systems and now vice president of marketing and advertising, remembers walking down deserted mall corridors to get to The Sports Authority's headquarters.

"It was dank, smelly and dark," she said of the mall.

At one point, she said, there was only one place to eat, Mr. Ray's Cafeteria. There you would see The Sports Authority employees ranging from Smith on down, she said. Then there was the regular clientele, white-haired seniors who were there for the cheap eats.

Today, the hot spot is Arby's, employees say.

Both stores resisted mall management pleadings to put an entrance into the mall. A mall entrance would have benefited the mall by funneling in shoppers but complicated store layout and security for the stores.

"We knew that mall was on its last breath," Smith said.

Both retailers created and honed their concepts there. Both chains were among the first of what's now called category killers - retailers that seek to offer a dominant selection of goods in their category. Both have helped wipe out smaller retailers who couldn't compete. Smith's former employer, Herman's Sporting Goods, has been among the victims.

They borrowed ideas from companies such as Home Depot, Toys "R" Us and Mr. HOW, a chain founded by an Office Depot co-founder, Pat Sher, now deceased. But they didn't initially have many models within their own industries, so they experimented at the Lauderdale Lakes stores.

Conway remembers that in The Sports Authority's planning stages, the store had a lot more of a Home Depot-type look to it. Merchandise was piled up like in a warehouse club.

"Jack Smith came in and saw us cutting boxes, and he said, `That's not the way it's going to be,'" Conway said.

The effect Smith was seeking was one of overwhelming selection.

"Nobody had ever seen a 32-foot-long, 12-foot-high wall of basketballs and footballs before," Conway said.

Similarly, the first Office Depot store forced you to walk through the paper department. That's because the company felt the prices of paper made the most dramatic statement - the first ad shows an $18.87 price for 20 pounds of copy paper with a list price of $45.